Analysis on the export of medical devices: The Polish market has great potential, and Chinese enterprises should seize the business opportunities

The medical device industry is a knowledge-intensive and capital-intensive industry in the fields of bioengineering, electronic information, medical imaging and other high-tech fields. In 2017, China's export of medical devices reversed the downward trend, but the export products were still mainly low-value consumables and middle and low-end products. Looking at the global market, the medical device market in Central and Eastern Europe, especially Poland, has grown rapidly in recent years and is very attractive, which deserves the focus of export enterprises.

Current situation of the industry: The export volume of massage apparatus is the highest, and the industry falls into the vicious circle of low price competition

Medical devices are characterized by great differences between products, including both simple products such as hemostatic sponges and disposable syringes, as well as complex large equipment such as medical magnetic resonance imaging equipment. Therefore, the development of medical devices is greatly influenced by the development level of basic industries in corresponding countries. The United States, Europe, Japan and other places have been in the leading position in the world for a long time due to their developed industrial base and years of technological accumulation.

In contrast, China's medical device industry has a weak foundation, small scale and relatively backward development. In 2017, China's total export of medical devices reached us $21.703 billion, up 5.84% year-on-year, reversing the declining trend in recent years. However, in the five major segments of medical equipment, medical consumables, dental equipment, health rehabilitation, and medical dressings, China's export advantages of medical devices still focus on low - and medium-end conventional products with price advantages, such as health rehabilitation, medical dressings, accounting for 44.5% of China's total export of medical devices.

In the field of large equipment, such as CT and MRI, due to the long-term monopoly of the global market by multinational companies, the technical level and comprehensive performance of high-end products in China are still far behind those in developed countries, with short clinical use time and low international market recognition. Therefore, China's export is still in a weak position.

At the same time, the problem of low price competition in China's medical device industry is becoming more and more serious. From 2013 to 2017, the average export price of medical devices in China decreased significantly. The reasons are mainly due to the rise of global trade protectionism. Some countries restrict the import of Medical devices in China by increasing tariffs, raising the entry threshold, increasing the frequency of supervision and other ways, which leads to the intensified competition of Chinese medical devices in the international market.

Market analysis: Polish medical equipment import dependence is very high, Chinese enterprises are expected to take a share

With the natural growth of the global population, the aging of the population and the economic growth of developing countries, the scale of the global medical device market will continue to grow in the long run. In 2016, the global sales volume of medical devices was us $386.8 billion, which is expected to exceed US $520 billion in 2022, with an annual compound growth rate of 5.10%.

From a regional perspective, the medical device industry in developed countries and regions such as Europe, The United States and Japan developed at an early age and have higher requirements on the technical level and quality of medical device products, so the market demand is mainly for product upgrading. Among the emerging markets, central and Eastern Europe is one of the most promising medical device markets in the world, with rapid growth in recent years and simultaneous demand for product popularization and upgrading.

Why is central and Eastern Europe the most promising market? The first is high demand. For a long time, the economies of CEE countries have been dependent on the developed countries in Western Europe. Some of them have a weak pharmaceutical industry base and rely on imports for most medical devices. At present, The trade environment of Poland, Bulgaria, Hungary, Czech and other countries is stable, the market demand is growing day by day, and the trade volume with China's medical device enterprises is increasing day by day. In 2011, the pharmaceutical trade between China and CENTRAL and Eastern Europe totaled us $770 million. In 2015, it grew to US $1.52 billion, nearly doubling in five years. In terms of medical devices, China's exports to the CEE market in 2015 were mainly hospital diagnostic and therapeutic equipment, disposable consumables and health and rehabilitation products, with the relevant exports of 177 million, 100 million and 90 million US dollars respectively, accounting for 33.2% of China's total export of medical products to CEE.

Secondly, it has location advantage. Although the size of the medical device market in CENTRAL and Eastern Europe is relatively small, this region has a good geographical advantage, which has a certain radiation effect on the European medical device market. It is worth considering that domestic medical device companies can further open the European market through Central and Eastern Europe.

Finally, health spending is rising. Health spending in central and eastern Europe is rising as populations age. In Poland alone, spending on health has increased by 22% in the past five years, reaching $30 billion in 2016. In Hungary, medical spending increased 25 percent to $9.5 billion over the same period. Other central and Eastern European countries are growing at the same rate. In addition to demographics, economic factors are also playing a role. Rising personal wealth has left people with more spare cash to spend on health care. Unemployment rates have fallen to record lows in most cee countries in recent years, and the overall economic environment is clear.

Which CEE countries have the biggest demand for medical devices? The answer is Poland. Located in the heart of Europe, Poland is the sixth-largest country in the European Union, with a population of 38.5 million. Poland is central and Eastern Europe's largest economy, largest population and largest market for medical devices. As a strategic location of One Belt And One Road and part of a trans-european transport corridor, it is extremely convenient to operate. At present, 74% of the products in the Polish medical device market are imported from the UK, Germany and the United States, while China takes a relatively small share in the import of medical devices in Poland, with great potential for future growth.

There are 400 to 500 medical device manufacturers in Poland, most of which are small and micro enterprises with about 10 employees. Their main products are low and medium price products such as disposable tongue spatters. Although some medical device manufacturers can also provide high-end products, such as implantable medical devices, orthopedic appliances, etc., 90% of the original parts and raw materials of medical devices are imported.

It is worth noting that Poland's market access mechanism for medical devices is not very transparent. Foreign enterprises usually need to pass the product certification through local agents or trading partners. In addition, the business relationship in the medical device industry cannot be completely closed through a single transaction, and there are issues such as after-sales service and maintenance, so polish agents usually expect suppliers to provide long-term service commitments.

In Poland, the price of medical devices, like any other commodity, is the most important factor in deciding whether or not to purchase them. Moreover, whether a hospital needs to buy some kind of medical equipment depends largely on the doctor's recommendation. Therefore, foreign enterprises often need to establish a good communication and cooperation relationship with doctors through local agents and trade partners, so as to timely provide new product information to doctors.